1 Mistake Kills Your Pre-Seed Funding

The Mistake That Gets You Blacklisted by Every VC

You have a prototype. Some early users. Time to raise pre-seed.

So you pitch VCs.

Congratulations. You just blacklisted yourself from future funding.

Rule #1: VCs Are the Wrong Target at Pre-Seed

VCs say they do pre-seed. They don't.

Here's why: VCs invest other people's money (Limited Partners). Angels invest their own.

VCs must show their LPs they evaluated 1,000+ deals, did extensive due diligence, and rejected 99.9%. They NEED pipeline fodder to justify the one investment they make.

Angels? They can write a $50K check because they like your energy. No committee. No justification. They decide on a whim.

When you pitch VCs at pre-seed:

• You're now in their CRM as "passed"

• Other VCs see you've been "shopped around"

• If they DO invest but don't follow on? Death signal to everyone

The lesson: Pre-seed rounds under $2M should come from angels. Period.

Rule #2: Stop Chasing. Start Attracting.

Only 1 in 100 startups successfully raises pre-seed funding.

Want to know the difference between the 1 who raises and the 99 who don't?

The 1 didn't chase investors. They made investors chase them.

They understood a fundamental truth about human nature: We value what we pursue more than what pursues us. The founders who get funded are the ones who master the art of being pursued.

I know what you're thinking: "But I'm burning cash NOW. I need money in 30 days, not 6 months."

This is exactly when founders make their biggest mistake. Desperation leads to pitching too early, which leads to rejection, which makes you even more desperate.

Yes, this requires discipline when you're watching your runway shrink. But rushing the process virtually guarantees you'll raise nothing and become one of the 99.

The best time to raise is when you don't need to. The second best time is to start building relationships 6 months before you'll need to.

Rule #3: Build Relationships Before You Need Money

Start 6 months before you need cash. Not with pitches. With conversations.

The Coffee Chat Script

Your exact words:

Never mention how much you're raising. Never pitch. Let them wonder what they're missing.

If they're exceptionally helpful: "Would you consider being an advisor? We're assembling a small group of experts before we raise."

The Power Flip

They'll ask: "So when ARE you planning to raise?"

Your response:

Now THEY'RE pitching YOU.

This works with angels at pre-seed. VCs at Series A. PE firms at Series D. The principle never changes.

The 3-Base Investor Funnel

Stop running a sales process. Run a seduction.

First Base: Get on Their Radar (Months 1-3)

• Start with advisors: Sign 2-3 domain experts who lend credibility

• Coffee chats with 20+ investors

• "We're not raising" is your mantra

• Ask for specific advice, not money

• Goal: Get them thinking about you without triggering evaluation mode

Pro move: When a coffee chat goes exceptionally well, offer an advisor role instead of taking investment. Advisors who help for months naturally want to invest when you open the round.

Second Base: Make Them Want You (Months 3-6)

• Monthly email updates (5 bullets max)

• Share wins, metrics, learnings

• Never ask for anything

• Goal: Create FOMO as they watch you grow

Third Base: Let Them Chase (Month 6)

• Open round only to those asking to get in

• Create urgency with rolling close

• Let them compete for allocation

• Goal: Turn their curiosity into competition

Home Run: Oversubscribed round with investors you want, not investors you convinced.

The Uncomfortable Truth About "Traction"

90% of VC investments are outbound - they chase founders, not the other way around.

The founders they chase?

• The ones they've been watching for months

• The ones angels are already backing

• The ones who told them "we're not raising" six months ago

When a VC says "come back when you have more traction," they mean: "Go become successful enough that I have to chase you."

Your job isn't to convince them. It's to become undeniable.

The Right Fundraising Sequence

Pre-seed ($500K-1.5M)

• Target: Angels only

• Timeline: 6-month relationship building

• Never: Pitch VCs (you'll get blacklisted)

Seed ($2-4M)

• Target: Seed funds + angels

• Timeline: Now those VC coffee chats matter

• Never: Take VC money unless they lead

Series A ($5M+)

• Target: VCs compete for you

• Timeline: They've been watching for 12+ months

• Never: Cold pitch (you should be warm by now)

Each stage builds on the last. Skip steps at your peril.

Your Next 30 Days

Week 1:

• [ ] Stop all VC pitches if raising under $2M

• [ ] List 30 angels in your space (Twitter, LinkedIn, AngelList)

• [ ] Identify 3-5 potential advisors with domain expertise

Week 2:

• [ ] Email 5 angels requesting advice on ONE specific challenge

• [ ] Start monthly update list (even with just 3 people)

• [ ] Reach out to potential advisors

Week 3-4:

• [ ] Schedule coffee chats (remember: you're NOT raising)

• [ ] Practice the script: "We're not raising yet - when we do it'll be selective"

• [ ] Convert helpful angels to advisors when appropriate

The Golden Rule: If they ask about investing, you're not ready. If they insist on investing, you're golden.

Stop Being Pipeline Fodder

The best fundraises look inevitable in retrospect.

They happen because investors feel lucky to be included, not because you convinced them.

Stop volunteering to be one of the 99 who fail.

Start building the relationships that make you the obvious 1.

Play coy. Build in public. Let them chase you.

The money follows.

References

• Elad Gil – Building VC Relationships Before Fundraising

• Harvard Business Review – Startups Need Relationships Before They Ask for Money

• Ash Rust – Increase Update Frequency Before Fundraising

• Foundersuite – Angel vs VC Funding Strategy

• Founder Institute FAST Agreement – Standard Advisor Agreement

What's your experience with playing hard to get with investors? Did it work, or backfire?